ORLANDO, Fla. – State leaders met in Tallahassee on Tuesday to discuss the current state of Florida’s insurance market.
This meeting comes as thousands of Citizens Insurance policyholders must make the choice to stay with Citizens or get coverage elsewhere.
“I think as we have the discussion about Citizens’ takeouts, one thing we need to keep in mind perhaps from the last time that we went through a major depopulation cycle is that it is a sign or a fact of a healthier market it is not generally the cause of a healthier market,” said Office of Insurance Regulation Commissioner, Michael Yarwosky.
Citizens sent out letters last month to more than 300,000 customers with offers to switch to a private insurer. Based on state regulations those who receive a takeout offer within 20% of what they are currently paying will have to leave Citizens.
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President and CEO of Citizens Insurance, Tim Cerio, said as the residual insurer, they should never compete with the private market.
“I just can’t stress enough the success of the (depopulation) program is vital to the recovery of the private insurance market in Florida and it is necessary to decrease our exposure and minimize our risk of assessments on the policyholders,” Cerio said.
There have also been five new company admissions this year which Yarwosky said is a positive result of the reforms that have been enacted.
“A lot of companies are acting on optimism, obviously. To form these companies, capital had to be raised, business plans had to be developed, people had to be convinced this was a viable market to enter and that the future was relatively bright,” Yarwosky said.
Central Florida insurance agent Tom Cotton said while there have been improvements, it will be a while before consumers can begin to feel a difference.
“You can’t turn a battleship around very quickly,” Cotton said. “It took us 24 years to get into this market circumstance. It’s going to take us at least 24 months to get out of it but positive signs are there because capital is coming into the marketplace.”
The deadline for Citizens customers who have received a letter to decide on their coverage is Oct. 10.
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